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A shopper browses at a downtown Toronto Canadian Tire store Sept. 19, 2012 that caters to urban dwellers.

Peter Power/The Globe and Mail

Retailers ranging from Canadian Tire Corp. to Sears Canada Inc. are racing to cash in on the trend of Canadians living in smaller spaces by stocking down-sized furniture, appliances, barbecues and other products.

They're developing smaller sofas and tables and offering more storage and baskets for consumers to stuff away their excess items. Canadian Tire is even shifting its focus to bicycles from car parts and tires in its city stores in a bid to lure the urban dweller.

But retailers are feeling the heat of more competition. U.S. home-goods purveyors Crate & Barrel and Williams-Sonoma Inc. have launched their own chains that cater specifically to the diminutive-dwelling market – CB2 and West Elm, respectively.

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"It has been an identified trend at Canadian Tire that Canadians are living in smaller spaces, and we have been growing our offerings with that in mind," said Anikka Foster, associate vice-president of home decor, home organization and electronics at the retailer.

The trend is so pronounced that Canadian Tire now distributes a separate flyer insert for areas with a lot of condos in a bid to lure those consumers with promotions for smaller microwaves, toaster ovens and multipurpose kitchen appliances. For example, a new Kitchen Aid mixer can also prepare dough, pasta and sausages along with traditional mixing functions.

The retailer's research found that consumers in small spaces want to be able to get rid of clutter by putting their belongings in a basket or other container, even if they aren't organized. "It looks better and that in itself is a simple solution," Ms. Foster said.

She said a key to designing products for small spaces is making them aesthetically pleasing and functional at the same time. For instance, Canadian Tire carries ottomans that can be used for storage and deck boxes that can be used for seating as well as storage on a balcony.

The makers of major appliances have also worked to downsize their products. Sears, for instance, sells more stackable washer-and-dryer units, and dishwashers that are 18 inches rather than the standard 24 inches, a spokesman said.

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